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Destination market boosts Whistler Blackcomb's bottom line



Destination visitor numbers continue to be the charm for Whistler Blackcomb Holdings Inc., with revenues following visitor trends and going up in every key metric.

At the press conference to outline the third-quarter results for the period ending June 30, 2012, Dave Brownlie, the company's president and chief operating officer, said he was pleased to report continued growth, with Whistler Blackcomb well positioned for future success.

"Overall, growth in both skier visits and effective ticket price drove increased lift ticket revenue. In addition, a higher proportion of destination visitors, combined with a pre-commitment and in-resort sales initiatives resulted in increased auxiliary revenues," Brownlie said.

Total resort revenues increased 10 per cent over the same period last year to $209 million, while for the nine months of the season ending on June 30, operating expenses totalled $103 million, said Whistler Blackcomb's chief financial officer, Kevin Smith.

Resort revenue increased by 12.7 per cent to $34.4 million for the quarter, driven by all revenue categories including lift, ski school, food and beverage and retail-rental.

Included in this year's lift revenue was $43.3 million in lift pass and frequency card sales, the highest in Whistler Blackcomb's history.

The company generated $42.8 million net earnings before income tax for the nine-month period ending June 30. This represents a 32 per cent increase over the same period last year.

The corporation's shareholders net earnings were $34.7 million, or 62 cents per share, for the nine-month period ending June 30, compared to $46.7 million, or 94 cents per share, for the period from Nov. 9, 2010 to June 30, 2011.

This difference, Smith said, was due to the prior year's results not including the half million dollars in net losses incurred by Whistler Mountain Resort Limited Partnership and Blackcomb Skiing Enterprises Limited Partnership from Oct. 1, 2010 to Nov. 8, 2010, as the two companies were not acquired by Whistler Blackcomb Holdings until Nov. 9, 2010. Income tax expenses for the 2011-2012 season were also higher.

The company has a balance of $53.6 million in cash for the period ending June 30, 2012, an increase of $13.1 million or 32 per cent over the same time in the previous year.

The corporation's net loss was $5.2 million, an improvement over the net loss of $7.3 million in the prior year. It is typical to report an accounting net loss in the third quarter, due to the seasonality of the resort business, Smith said.

Total lift revenue, including sightseeing, hiking and bike park revenue, and increases in destination visitors led to increases in auxiliary revenues, such as ski school and rentals, he added.

Skier visits increased by 100,000, a five per cent increase over last year. This was driven by a 20 per cent increase in destination visits, while regional visitor levels remained steady from the 2010-2011 season.

"We believe that Whistler Blackcomb is enjoying unprecedented international awareness and this resulted in strong growth in all our key destination markets," Brownlie said, including from key European markets hit by the economic downturn there.

Another factor for lift sales increases included the Easter holiday coming at the end of March, a month of higher pass prices.

Brownlie said the resort's cash position increased by 32 per cent compared to the same period last year, allowing the company to plan to spend $10 million to $12 million on maintenance capital for fiscal 2012. Priorities include purchasing seven high-tech snow-grooming machines and improvements to the resort's IT infrastructure.

While destination visitors played a key role on Whistler Blackcomb's books this season, the company also reports ongoing strength in the regional market with a new record for pre-committed revenues. The regional market continues to be a key performance driver.

The overall result of the numbers, he added, meant stability for the company.

 "With the 2011-12 season now complete, Kevin and I are both very pleased with the performance of the business and want to acknowledge all the people both in the front lines and behind the scenes of Whistler Blackcomb who have contributed to the accomplishment of these strong results," said Brownlie.

"Our efforts to continue to grow destination visits truly paid off and our proven strength in the regional market has driven increases in all our key metrics. Our summer business continues to be a stable source of revenue for the third and fourth quarters."

The high snowpack created a challenging start to the summer season, but it improved and met expectations as the snow melted from July onward. The 46 feet of snowfall last winter solidified Whistler Blackcomb's advantage over competitors, Brownlie said.

Sales of passes and frequency cards for the coming 2012-2013 season in the third quarter were up 7.5 per cent over the same time last year, locking in pre-committed revenue.

"Our first indicators for the upcoming ski season, though very early, are positive and our entire team is looking forward to a great season," Brownlie said.

The one sad note was the resignation of Smith, who said he was leaving for personal reasons. His last day with the company will be on Sept. 10. Brownlie will assume Smith's responsibilities while the search for his replacement takes place.

Whistler Blackcomb Holdings Inc. owns a 75 per cent interest in each of Whistler Mountain Resort Limited Partnership and Blackcomb Skiing Enterprises Limited Partnership.